BlueScope Steel and Rio Tinto have agreed to begin exploring methods of decarbonising the steel-making process — including setting up Australia's first 'green steel' plant.
The companies signed a Memorandum of Understanding (MOU) to investigate the production of low-emissions iron feed using hydrogen.
The hydrogen will be produced using renewable energy instead of fossil fuels — known as 'green hydrogen'.
The announcement is one of the strongest signals yet that Australia's largest steel producer is planning for a future without coal.
"BlueScope's goal is net zero greenhouse gas emissions by 2050 for our global operations," BlueScope chief executive Mark Vassella said.
Rio Tinto is Bluescope’s largest supplier of iron ore and has also committed to reaching net zero emissions by 2050.
“We realise that, to get there, we need to investigate multiple pathways and strike partnerships across the steel value chain,” Rio Tinto Iron Ore chief executive Simon Trott said.
Pilot 'green steel' plant
BlueScope has enjoyed a record-breaking year amid soaring demand for its steel products both domestically and abroad.
It has committed to spend $150 million over five years to decarbonise its operations.
Initially, the steel-maker will begin assessing the scale of a 'green steel' pilot project at Port Kembla — consisting of a hydrogen electrolyser, direct reduction equipment and a melter.
The NSW government recently announced a $3 billion roadmap for developing a 'green hydrogen' industry.
It claimed that the first green steel pilot project to be built in the Asia/Pacific would qualify for the funding.
Despite a number of zero-emissions steel projects emerging abroad, BlueScope still believes it will be decades before it replaces current steel-making methods.
The company is in the process of relining one of its blast furnaces — a highly expensive project expected to cost up to $800 million.
However, the steel-maker is exploring short-term emissions reduction options — such as replacing the use of coal in the blast furnace with charcoal from logging and construction waste.
